It is tempting to congratulate ourselves for calling the outcome of negotiations between the ports of Tacoma and Seattle last week — well, mentioning one possible outcome that sort of looks like what the ports came up with, anyway.
And it is tempting to say, “Whee, Tacoma won!” by virtue of the fact that it’s Tacoma’s port director who will be heading what is, for the moment, being called the Seaport Alliance.
As wonderfully reassuring and self-congratulatory as those exercises might be, there’s one fatal flaw that keeps us from carrying on too long or loudly.
That problem: We’re not quite sure what it is we’d be cheering for.
Or, more properly, we’d be cheering for a piece of paper with a bunch of words on it that don’t, as yet, have any specifics or concrete action or (to use a favored bit of contemporary jargon) “context” behind them.
As reported by the TNT’s John Gillie, “Now the real work begins,” said Port of Tacoma Commission President Clare Petrich.
All the pretty verbiage about “financially sustainable business models that support customer success” or creating “the strongest maritime gateway in North America” will do exactly nothing in encouraging one more shipping line to call at the sort-of combined ports of Puget Sound, or keep them from defecting to less expensive, more efficient, closer-to-the-destination ports.
There’s a reason someone long ago came up with what is now a cliché, noting that “the devil is in the details.” And in this case we don’t know the details, because they haven’t been worked out yet, which makes spotting the pitfalls, problems and potential for internecine conflict between the ports difficult.
Difficult, but not impossible to guess where they’re going to come from. If the ports truly plan to be competitive with rivals on the West, Gulf and East coasts in recruiting and retaining shipping lines, then a prime item on the agenda of detail-setting is rates. If rates are going to come down, the ports will either have to ask taxpayers for more money or cut expenses.
The likelihood of the former is not great, given that taxpayers want to know what the ports are costing them and what they get in return. And oh yeah, governmental agencies in Pierce and (especially) King County all have their own active plans for increasing their tax take.
So if it’s the latter — cut expenses — which ones? What departments get consolidated, what jobs get cut, what tasks get allocated where, what fiefdoms and turf have to be protected? If creation of the Seaport Alliance results not in cutting but in adding a new bureaucratic layer (with attendant expenses), what’s really been gained? If one port (hint: Tacoma) winds up being the dominant seaport, how does that play politically in King County? How about with the union locals?
That should keep those who have to turn the grand pronouncements of the port commissions into real-world, on-the-dock plans occupied awhile. Here’s one other item they, and the commissioners, can mull over in their free time: The matter of rates addresses only a portion of the competitive challenge.
The regional ports are an important connection in the global supply chain, but they’re just one component of the route between origin and destination, and about the only one the ports have control over.
The ports can control what they charge for ship calls. They can control how long it takes to load and unload a vessel.
What they have little sway over is how fast that outbound container or incoming carload of grain can move, and that too figures into the competitive calculation on where freight lands on or departs from North America.
The conventional thinking is that, between the two regional ports, Tacoma holds the edge since it operates its container terminals in a less congested area than the Seattle waterfront and Harbor Island, and that long-term trends of competing land uses will eventually squeeze some of Seattle’s maritime uses out.
There’s truth to that — the Tideflats provide more options for configuring efficient operations and moving cargo in and out than running trains and trucks through Sodo.
But after that? What happens to that container once it hits the highways headed for the Kent Valley, or north or south on Interstate 5, or to that grain car trying to get here from the Dakotas?
The regional freeway system is overburdened with traffic and choke points. That’s even more true with the freight rail system. One competitive edge Canada’s ports are offering is a faster rail connection to many of the same markets shipments Tacoma and Seattle are headed to and from. The competitive advantage offered by East Coast ports post Panama Canal widening is to be closer still to ultimate destinations.
These are not arguments for not trying an alliance. They are, however, a caution against slapping the adjective “historic” on formation on the Seaport Alliance just yet, and a reminder of the limitations of what an actual seaport alliance can accomplish. If we get one. Which we haven’t. Yet.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.